It wasn’t supposed to be this way. Craig Whyte would not have expected Champions League football when he worked on the deal to buy Rangers last spring, but, by his own admission, income from the Europa League group stage was in the budget.
Winning the league came as a surprise late in the process and may have fuelled some summer transfer bids but income was about to fall well below expectations. Ally McCoist won only one game in four cup competitions, against Arbroath, season ticket sales didn’t bounce and with no serious income streams open, Rangers were set for a seriously low income season.
In addition, the injury to Steven Naismith robbed Rangers of what I understand would have been a £5m sale in January.
People have tried to assert that Whyte’s plan for Rangers was to liquidate the company all along, this is clearly not the case. Rangers were moribund while the First Tier Tribunal (FTT) was yet to report but Whyte planned to run the company, without reverting to administration until and perhaps beyond then.
As well as having to deal with the income shocks resulting from multiple on-field failures, Rangers were hit with an expenditure shock. The FTT was delayed from November to January. If it had proceeded as planned in November it would have reported in January. The delay was crucial, Rangers were going to spend a lot more money before the verdict was announced.
If the verdict arrived as expected in January, and Rangers won, it was game on. They would have been in a position to borrow like any other club and could have raised fresh share capital. There would have been no administration. This was the preferred outcome, Whyte would have emerged with his reputation intact and with a valuable football franchise for the outlay of exactly £1.
If they lost, Whyte could have presented a fait-accompli to the world.
He could have explained to the Rangers support that the total tax liability was “likely to be around £75m” and that there was no point putting fresh investment into a black hole, which was inevitably going to lead to liquidation – all for misdemeanours that occurred before his time. The support would have been distressed at the death of their history, but, crucially, they would not have blamed Whyte, whose reputation would still be intact.
He would immediately have applied for the 10 day grace period to consider appointing an administrator and used that time to tell the SPL and SFA that he could re-emerge with Newco FC within days and allow the league programme to complete as normal. He had security over the stadium, would be in a position to re-employ the players and would be able to honour financial commitments to other clubs, while securing the television and sponsorship contracts.
Public sympathy would have been behind him, Sir David Murray would have carried the blame (perhaps correctly) and I believe only Celtic would have voted against him. Newco would have been back in the SPL and, if the Daily Record’s reporting of Whyte’s thoughts on penalties are anything to go by, he expected to be docked a comfortable 25 points.
HMRC forcing Rangers into administration this month created enormous problems. Administrators Duff and Phelps are now in control and opened the club’s finances up to scrutiny.
As soon as it became evident that he securitised season ticket money from future years, three days after buying the club, placing the money into his own bank account, not that of the football club, Craig Whyte’s methods were subject to derision and outright disgust from many angles, most importantly from the Rangers support.
As things stand, Whyte cannot slip away. He has to stand with Ticketus, who will hold a security on Ibrox through one of Whyte’s companies, and he stands to gain an enormous amount of money for a year’s hard work. Ticketus are also in for the long haul, they have coughed up over £20m and will need a sizeable commercial return.
Many observers have noted that this has not progressed as a normal administration. It’s not a normal administration. The secured creditors (Craig Whyte and Ticketus) need to sell a lot of tickets beyond administration, either as Rangers, if they are successful in the FTT, or as Newco, if they lose the FTT. Selling a lot of tickets is a really tough challenge right now and will be made considerably more difficult if there are swingeing cuts made to the club staff and infrastructure now. Their interests are considerably best served by keeping Rangers as buoyant as possible.
Even if they manage to feed enough cash to the administrators to keep Rangers playing football until the verdict is delivered, the opportunity to present the league with a fait-accompli has gone. Everyone expects Rangers to fold and will have been busy working on a contingency plan.
Any goodwill that Whyte hoped to harvest has also gone, he is seen as a pariah, without friends within the game, in the political world, the media or the Rangers support. When he looks to build a consensus, there will be no advocates for his position. Quite the opposite, people want rid of him.
The on-going police enquiry and his interesting relationships with the Insolvency Service and HMRC will only cloud matters further. For all the bluster on these subjects, no one has been able to explain to me any illegal activities, in fact, most of the illegal activity he has been accused of are either perfectly legal or simply did not take place as described, but there is enough potential in this mix for many years of civil legal challenge, if not more serious issues.
Whyte and Ticketus now have decisions to make on how much extra skin to invest. Ticketus are in the game for a lot of money already and will be keen to protect their cash. It remains to be seen how much cash Whyte has in the client account at Collyer Bristow, but it’s clear that between them, Ticketus and Whyte were prepared to guarantee the administrators full wages and costs for the club for February.
The fact that the tap has been turned on 100% for the last two weeks suggests they have enough cash to run at a lower percentage for a while yet. Duff and Phelps will know how much money is available and will have an expected date for the verdict. It would be enormously bad judgement if they exhausted cash reserves before the verdict arrived.
As long as Ticketus investors hold their nerve, and the police don’t spike the process, Rangers will survive until the verdict. If they lose the verdict, and all expectations are that they will, what are we looking at?
As I said above, Whyte’s chance of presenting a fait-accompli has gone. He would need to go for a prepack liquidation but there are likely to be legal challenges to him making off with the assets of Rangers. At best, this would delay him for anything between weeks and years. Any police involvement would make matters even more difficult. If a negative verdict is delivered anytime soon, Rangers will cease.
Even if this happens, Whyte will still owe Ticketus a lot of money and will try to phoenix as a Newco. He will have the stadium and will be in pole position to apply for membership to the SPL or Scottish Football League.
A route back into the SPL in these circumstances would be difficult to achieve. The SPL board have the authority to accept a club into the league but I hear it is likely that, due to the importance of the matter, they would refer the decision to a vote of the entire league. Back in October I thought the fait-accompli was certain to be voted into the SPL, now I can’t see a Newco being voted in.
You would expect an application into the Scottish Football League to be accepted but there may be a rival bid. The ‘Blue Knights’ bid would not include Ibrox but have a number of options. They could ask to rent Hampden or Firhill, or could adopt a struggling lower league club, like Clyde. These notions are likely to be progressed but establishing a new club, without players or a stadium, would be an enormous challenge.
All of this would play out against a great deal of uncertainty. Whyte’s ability to sell tickets to Rangers fans must be in doubt. If a rival club wanted back into Ibrox in the future they would need to give the ultimate floating charge holder – Ticketus – the same kind of return Whyte has committed to. There is also the possibility of a lot more to come out about the old regime at Rangers, some of whom are behind the Blue Knights bid.
Even if someone gets a phoenix off the ground at Ibrox, keeping it alive will be difficult. The cost of running football games there every second week is considerable. Doing so, while repaying Ticketus, and competing against lower league (or SPL) opposition, will cut any football budget to levels not known in 30 years.
For now, everyone connected with Rangers needs to make confident noises but even if they die, their ghost is already in enormous peril.
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The man that drinks his own bath water will never get my vote.
To be fair to shallow man. When he said fabric I think he meant the sash’s and them big curtains the stick poles on to carry them.
James Forrest is The Emperor of Ice Cream
Every word the truth about Rangers they truly have reaped what they have sown
My hat off to you sir
Hail Hail
Phil MacGiollaBhain @Pmacgiollabhain
Surely the Suave Billionaire did not sell off the famous club crest,design and copyright? No, I refuse to believe that one…. #aghast
r c 21.18
You are kidding???
Who will play the ghostbuster?
Aw Naw
There are only 2 outcomes:
Any Liquidation = Newco (or newcos) emerging in some shape or form.
RFC win against HMRC and go on but badly wounded and at some point exit admin but paying their bills.
Whyte says he has a plan either way. No idea if I believe him because he’s hunbelievable.
The more this goes on the more I want them to win the ITTT appeal.
That way they don’t get off lightly.
HH
Auldheid
When I saw that Nimmo was to chair the enquiry, if you can call it an enquiry, I was of the mind, whitewash, and nothing has changed that.
As far as I can see they have no remit to investigate anything, apart from getting the sfa off the hook re the takeover.
The pressure needs to be kept up re the contracts and the issuing of licences, which has gone worryingly quiet the last few days.
James, another piece of historic prose that can be looked upon when we tell the kids….”aye and that was when the Rangers died”
“and you know what son, nobody ever knew what happened to the Big Blue Walrus when the Big House closed”
watching Troy on sky just now..
I hope the huns go down but I think it is as much a myth as bradd Pitt.
Phil MacGiollaBhain @Pmacgiollabhain
This is a very troubling story. About a new logo being copyrighted to replace the old one being sold off. So I will refuse to believe it…
Interesting line from Phil……..
James Forrest
Exceptional post!
HH
James Forrest
Brilliant, Articulate, Factual.
HH
I wouldn’t get too upset by the lack of cost cutting at Ibrox. The longer they don’t cut costs the longer they stay in admin. Has the delay not got more to do with the attempts to get money from Whyte?
I’m more concerned at what is happening at the Daily Record. What will Scotlands third biggest institution do next? Will we see more lies tomorrow?
What readership do they hope to attract in future if any? Not that I am an SNP supporter but they backed the Labour party again. They then denied any issues at Rangers in comical Ali fashion, then said it was them that broke the story, and now they blame Celtic. Absolute lies but they must think that will make folk buy the rag and stay with it when Rangers die.
I’ll tell you what has made these days extra special … the sense of creeping dread amongst even the most blindly optimistic commentator as the scale of the disaster has become clear. I loved King tonight, talking about how Rangers will definitely be back in the SPL next season … this from the man who gave Craig Whyte the benefit of the doubt, who said they would not enter administration, who then said they would spend money in January, who said Jelavic would go for around £8 million, then thought they’d get Sandaza, then called him a squad player when they didn’t, then when faced with administration said liquidation was unlikely verging on inconcievable and now believes it to be inevitable ….
Through all of it, the sound of fear has been rising in his voice, more with every day that passes. Some of the suggestions being mooted by Rangers fans are the last vestiges of denial … almost everyone now realises where things stand.
Like a lot of you, what concerns me now are the social repercussions. It’s a bad time to be walking about on your own, dressed in Hoops.
I’ll pass on a story, a true story, which happened to me last week.
I was going to my good lady’s house for dinner, but I had forgotten to get some stuff. So I was trying to cross the street, to go to the shops, and I stopped in the middle of the road to wait for the traffic to pass on one side. The other side, my side, was totally clear … until a car came speeding round the corner and skidding to a halt just behind me. Now, I thought it was because the traffic lights had changed or something, and I waited for the oncoming traffic to stop … which it didn’t … instead, I heard a torrent of abuse from the woman behind the wheel, who had careered round the corner too fast to see me and had to break.
After listening to her abuse for about ten seconds I told her to shut it and drive on, and then the guy in the passenger seat started shouting and bawling the odds and I told him to shut it and tell his missus to move the car (which was now blocking another in the road.)
That’s when he started shouting the “fenian” this “fenian” that … and for a moment I was too amazed by his reaction, as I was wearing nothing that could have given away my allegiances.
I told him to get out of the car and say it, inviting him to repeat it to my face instead of from behind his wife, and after some more shouting his missus finally started the engine and they drove away … leaving me to ponder just where he had plucked the notion out of the air that I was one of us.
Two things dawned on me; we are naturally good looking, so perhaps that’s it. And we are the only people in Glasgow wearing wide smiles ….
It was only later that night the truth actually came to me; these people are angry right now, angry at everyone, at everything … and their hate is manifest most gloriously in hatred of us …. He was pissed off, spoiling for a fight (which he bottled out of it, as it happens) and in his rage he threw at me the worst insult in his limited vocabulary …. and so a fenian I was, even if I hadn’t been.
That’s the general mood of these people right now.
James Forrest is The Emperor of Ice Cream on 1 March, 2012 at 20:47 said:
That was an Oscar performance James.
7m Phil MacGiollaBhain @Pmacgiollabhain Reply Retweet Favorite · Open
Surely the Suave Billionaire did not sell off the famous club crest,design and copyright? No, I refuse to believe that one…. #aghast
Phil MacGiollaBhain @Pmacgiollabhain Reply Retweet Favorite · Open
This is a very troubling story. About a new logo being copyrighted to replace the old one being sold off. So I will refuse to believe it…
JF,
On a day when SSM and Mr 67 delivered a double whammy you have just completed the Treble!
You are spot on. In fact, as I scrolled down I just knew you were going to accuse their fans.
Their only hope would be if they had fans like you that could rally and inspire the troops.
Alas, for them, they have Mark Dingwall!
Oh Dear!
The question needs to be asked…….Do they “deserve better”..?
There have been more folk tried for crimes against Neil Lennon than have left Glasgow Rangers in administration
Auldheid,
you think he might need a brush for the whitewash
Top article Paul
A new club crest? Now why would an old club need a new club crestV
James Forrest. Simply brilliant article.
Incidentally, my new boss is a dyed in the wool Hun, which I found out yesterday on a training course he was holding. Tattoos, FPLG belly, the whole shabang. BUT….a very nice guy! Could see all this coming, hates the papers -‘liars for years’ were his very words – and is not without a plethora of Celtic friends. Actually admired me for being a non-catholic Celtic fan.
Still gave him pelters all day. Would have been rude not to.
Ceaser67 on 1 March, 2012 at 21:22 said:
r c 21.18
You are kidding???
Aye. But I’ve got this horrible bloated image.
Tweet from Phil Mac:
“Surely the suave billionaire did not sell off the famous club crest, design and copyright? No I refuse to believe that one….
#aghast”
James Forrest
In my experience it’s the quiet ones you need to watch out for………..
HH
Answers on a postcard, please
James Forrest is The Emperor of Ice Cream on 1 March, 2012 at 21:27 said:
It was Guidi James. I see others have thought it was DK but it was Guidi.
Sorry, just saw that’s already been posted.
Neil canamalar Lennon hunskelper extrordinaire on 1 March, 2012 at 21:30 said:
Me no likey. The whole thing smacks of damage limitation.
Auld Neil Lennon heid:
Thanks for that mate.
Congratulations are in order to you and the other guys who’ve been pushing this line on the European licenses. When even Guidi is admitting that bill was never paid, and that Rangers never had any intention of paying it, there’s not much room for dubiety any longer on the issue … keep hammering them on it.
They’re going to crack. They have to.
Auld Neil Lennon
And I believe Capt Nimmo was a judge on the Lockabie bomb appeal.
New edvidence was showing a probable miscarriage of justice but the appeal was turned down. Seems he likes to protect the establishment !
A new crest mmm…maybe the auld yins cracked!
James Forrest dont no you mate,maybe someday I will get to buy you a pint,great post again,
me just shut the coffin lid and be done with Peepel
So Traynor says he has evidence that proves that Lawwell is talking a load of mince and he did have an agreement with RFC (in Admin) to give the ticket money up front.
I would call his bluff and ask him to prove it if I was Lawwell!
67 Heaven
Butter’s to good for them………… newco should be
I can’t believe it’s not bigots FC (2012)
HH
JF
two weeks ago I stood at the end of India St at the lights..
some clown drove throw a puddle to splash me..
I called him an clemintine busterd… why?
because no tim would do such a thing…